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Goldman On The ISM: "Composition Of The Report Was On Weaker Side"..."An Increase In Inventories Is Negative For Future Activity"

Tyler Durden's picture




 

When even Goldman is downplaying the end all report which is certainly not all it is being touted to be, there is little that can be added:

BOTTOM LINE: The ISM beats expectations and rises in June. The details of the report, however, were weaker than the headline as more than half of the headline increase was due to an increase in inventories

The Institute for Supply Management (ISM) rises unexpectedly in June, up 1.8 points to 55.3. As the median forecast and ourselves had looked for a decline, this is clearly an encouraging upside surprise. The composition of the report, however, was on the weaker side. Specifically, a sharp increase in the inventories index (from 48.7 to 54.1) explained 1.1 points of the 1.8 increase in the headline index. If anything, an increase in inventories is a negative for future activity. The remaining 0.7 point of the headline increase was due to small increases in new orders (by 0.6 point to 51.6), production (by 0.5 point to 54.5), supplier deliveries (0.6 point to 56.3) as well as a more sizable increase in employment (1.7 points to 59.9).

 

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Fri, 07/01/2011 - 11:54 | 1419114 66Sexy
66Sexy's picture

Sorry kids, crash got canceled.

BTFD.

Fri, 07/01/2011 - 11:26 | 1418990 rosiescenario
rosiescenario's picture

....and Liesman will spin this as the inventory increase shows the confidence of the manufacturers....

Fri, 07/01/2011 - 11:26 | 1418993 He_Who Carried ...
He_Who Carried The Sun's picture

hE T-Durd, DS-K is getting out: prosecutors doubt credibility of chambermaid who is involved in drugtrafficing and money laundering...

DS-K may be free as of tomorrow!

Fri, 07/01/2011 - 11:40 | 1419034 anynonmous
anynonmous's picture

where's ZH on this?  he was all over the arrest but has gone strangely silent on these developments - we need a WB7 reprise

Fri, 07/01/2011 - 11:45 | 1419065 SheepDog-One
SheepDog-One's picture

'Gone silent'? What are you talking about theres an article up on it.

Fri, 07/01/2011 - 11:40 | 1419047 SheepDog-One
SheepDog-One's picture

No, he's not free, prosecution not dropping charges, and does not get his passport back.

Fri, 07/01/2011 - 11:33 | 1419025 RobotTrader
RobotTrader's picture

Why is Geithner leaving?

He achieved the impossible.

650 Dow points in a week while the CRB Index is collapsing.

http://www.crbtrader.com/data.asp?page=chart&sym=CIY0

Maybe they are going to hire Brian Sack to replace him?

Fri, 07/01/2011 - 11:47 | 1419053 SheepDog-One
SheepDog-One's picture

-850 next week, just the start of no QE POMO puke bucket and plastic tarp cold turkey for your bubble equities. Bonds are hurtin bad, stocks will be sacrificed. Youll get knee capped big time on this one roboclown.

Of course that wont matter in your case, youll just report that you called it, and positioned properly for it using the rear view mirrors attached to your monitor.

Fri, 07/01/2011 - 11:54 | 1419095 buzzsaw99
buzzsaw99's picture

robo has a better trading record than the squid. lulz

Fri, 07/01/2011 - 11:44 | 1419061 Greeny
Greeny's picture

He spoke on CNBC, I heard him denying that rumor BS,

he's not leaving anywhere anytime soon.

So much for doomsters :) Markets are flying.. Sold

some naked puts on my silver stock at the bottom..

Hopefully Silver will run higher from here.

Fri, 07/01/2011 - 11:56 | 1419106 Boston
Boston's picture

Interesting point about the CRB collapsing.

Makes me think about not the collapse of the CRB in 2008, but the timing---it began to plunge in July.....just a couple of months before equities tanked.

Hmmmm....

 

Fri, 07/01/2011 - 11:37 | 1419038 Caviar Emptor
Caviar Emptor's picture

Here's my take: what's being hinted at in the report and what's clear to me from the new orders/inventory divergence and even the absolute order level is this: there's a whole lotta fluff from artificial stimulus goosing the index in the absence of real demand. We know that's true in the auto sector for sure. And I suspect it's true across the board. 

Monetary stimulus gooses the general confidence level, both on the manufacturing and demand side although with very little bang for the buck on the demand side thus creating an inventory imbalance. But wait, there's more. There was the mystery fiscal stimulus package which has been doled out to the manufacturing sector. 

So we have a perfectly biflationary set up: artificial demand and confidence in the setting of declining demand, reinforced by rising prices. And that sets up the monetary end game: more stimulus (QE3) will only raise prices, weaken demand and create an even more precarious imbalance

Fri, 07/01/2011 - 11:41 | 1419039 AccreditedEYE
AccreditedEYE's picture

Someone should tell The Squid that the Algos and Interns left in charge of the trading desks across the Street were set on auto-pilot into the holiday weekend. They only understand: BUY. We should be thanking them for these higher prices to sell into. Go ahead Johnny 5, breach 2834 today.. I dare ya.

Fri, 07/01/2011 - 11:49 | 1419085 RobotTrader
RobotTrader's picture

SPY up 5% this week. 70% of the 8 week loss wiped out in 5 days.  Who says stocks fall faster than they rise?

This might be the most stunning rally i've ever seen considering the market already ran 100% in 2 years and hardly declined during this correction.  I was betting on 10% - 18% correction and it barely even went down 8% with the absolute worst news flow imaginable.

Fri, 07/01/2011 - 11:51 | 1419102 Johnny Lawrence
Johnny Lawrence's picture

And this is why when it does collapse (whenever that is), the damage will be of epic proportions.  I do strongly believe we'll eventually see new lows...no idea when...but history has already taught us this.  No new eras when it comes to the market.

Fri, 07/01/2011 - 11:58 | 1419112 Greeny
Greeny's picture

Few of my option spreads were taking down by this

superior move. Retail investor will start sucking in ones

DOW cross 15000 :)))

Fri, 07/01/2011 - 12:09 | 1419162 slaughterer
slaughterer's picture

Does anyone else see the H&S on the 6 month?

Fri, 07/01/2011 - 12:04 | 1419142 Internet Tough Guy
Internet Tough Guy's picture

Momo, why don't you give Petey credit when you steal from him? LOL

s@p up 5% this week. 70% of 8 week lose wiped out in 5 days. who says stks fall faster than they rise?
peteybear - Fri, Jul 1, 2011 - 11:33 AM

 

Fri, 07/01/2011 - 12:19 | 1419212 RobotTrader
RobotTrader's picture

Petey is my buddy from Destin, he knows I love to shove his one-liners onto ZH.

He can't do it himself because he can't spell.....LOL

Fri, 07/01/2011 - 13:02 | 1419372 lieutenantjohnchard
lieutenantjohnchard's picture

amazing how quick the contract 1099 processor responds when caught in a lie, just as he did when i caught him lying about being a big shot in a bank rolling big loans etc .... still, he doubled down when i caught him lying and responded with tales of corner offices, 4 monitor work stations and the like.

Fri, 07/01/2011 - 11:49 | 1419087 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

The cornered rat is both viscious and crafty.

Price discovery in a managed economy is now policy driven and therefore completely opaque.

Those in the know benefit. Those who don't know but watch those in the know benefit. Those who know nothing might even still benefit in the rising tide lifts all boats category. They just benefit less, but if you look over the last ten years your benefit has been that you were not completely wiped out and are back to where you were in effect.

Strange days and while risk comes off, it is merely biding its time.

Fri, 07/01/2011 - 12:00 | 1419123 slaughterer
slaughterer's picture

When do we feed this Goldman report into the algos?  Next week?  Until then, let the drunken BBQs in the Hamptons and high-end hookers tethered to their PigMen start to party.  Go USA!

Fri, 07/01/2011 - 12:04 | 1419143 apberusdisvet
apberusdisvet's picture

Is anyone getting the same feeling that I have that not only are the BLS numbers bogus but that any other significant issuer of economic statistics is part of the same propaganda team?

Fri, 07/01/2011 - 12:14 | 1419190 whstlblwr
whstlblwr's picture

Also, what I not understand about this? Maybe missing something. If bank forced to raise reserve requirements, how they do it? Isn't easiest way to coordinate all 30 banks buy stock to raise money? If I Obama and want market to go up, need to make banks buy stock, how else?

Fri, 07/01/2011 - 12:00 | 1419147 slewie the pi-rat
slewie the pi-rat's picture

do you want the good news first, or the bad news first?

unhhh...i think i'd like to hear the bad stuff, first, t.y.

ok, slewie, the bad the news is that the good economic news doesn't matter...

and...?

...the good news is that the markets think that the bad news doesn't matter...

 

Fri, 07/01/2011 - 12:48 | 1419309 mayhem_korner
mayhem_korner's picture

+1 brilliant.

Fri, 07/01/2011 - 12:18 | 1419208 Caviar Emptor
Caviar Emptor's picture

Once again the market is just a proxy for the survival of the TBTF. That's it. 

And that includes the primary business they are: making profits pumping and dumping stocks. 

So news of Greek bailouts supports TBTF banks and their interconnected brethren on both sides of the Atlantic. So does news that GOP has agreed in principle to raise the US debt ceiling. And the full expectation of QE3. The economy does not matter. 

Fri, 07/01/2011 - 12:21 | 1419220 sheeple2012
sheeple2012's picture

Exiting transitory soft patch boo-yatches!

Disclosure: Long burritos, yogawear, plastic shoes and single-serve coffee

Fri, 07/01/2011 - 12:34 | 1419261 Lone Mad Minute...
Lone Mad Minute Medic's picture

Come on! BTFD! in NFLX before its too late. you too can pay 8 federal reserve notes a month for movies you don't even want to watch. Get in quick. Good is bad, bad is good. Grab the bag before its too late. S&P to the moon Alice.

Fri, 07/01/2011 - 12:53 | 1419333 mayhem_korner
mayhem_korner's picture

If anything, an increase in inventories is a negative for future activity.

Unless, of course, we are secretly migrating to a "warehouse economy."

And...cut to GM.

Fri, 07/01/2011 - 15:23 | 1419858 Bunga Bunga
Bunga Bunga's picture

The Institute for Supply Management (ISM) rises unexpectedly in June,

 

So nobody in US of A expects the recovery anymore? You are really depressive, you need more Bunga Bungaaaaaaaaa !

Fri, 07/01/2011 - 20:34 | 1420562 taca
taca's picture

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Sat, 07/02/2011 - 07:44 | 1421071 Grand Supercycle
Grand Supercycle's picture

Since DOW/SP500 is now EXTREMELY overbought, the reaction next week should result in a significant retracement.

S&P500 daily charts show updated rising wedge and possible head and shoulders pattern with target of 1,150 when confirmed.

http://stockmarket618.wordpress.com

Do NOT follow this link or you will be banned from the site!